Money without a trail

Image: Collected
While Bangladesh's economy is continuing to grow, the Swiss coffers of the super wealthy have very easily outpaced and inevitably outgrown that expansion. Between 2004 and 2019, the compounded gross annual growth amount of Bangladesh's actual GDP was 10.78 percent (current USD rate). Through the corresponding period, deposits to Swiss bank accounts from Bangladesh increased from Tk 3.65 billion in 2004 to Tk 53.67 billion during 2019. Given the frequent reports of the monetary shenanigans of the influence-mongers, one can't help but wonder just how much of it has truly gone through legal channels.

And people out of every sphere of the sociopolitical spectrum seem to have a submit it: from politicians and federal government officials to prominent industrialists and tiny scale operators-all have significant involvement in one of the most widespread monetary crimes that's money laundering. Not to mention, there will be the more recognised criminals: medicine traffickers, individual traffickers, terrorists and the wants thereof.

In 2020 itself, two prominent money laundering scams did the rounds on the media. First, the curious case of PK Haldar, whose ingenious laundering of Tk 10,200 crore to countries such as for example Canada and Singapore would tempt any film scriptwriter and second, the criminal actions of a lawmaker, who together with his lawmaker wife and relatives, was not only involved with money laundering, but also in the more sinister crime of individual trafficking.

According to media studies, between 2016 and 2020, Tk 355 crore was transacted from around 500 lender accounts of the independent lawmaker intended for Laksmipur 2 Mohammad Shahid Islam Papul and his associates. Papul's wife, reserved-seat independent lawmaker Selina Islam, their child and close relatives were all allegedly involved in this. They produced their fortunes through human trafficking.

These figures appear incredible, but they are just two of the numerous money laundering incidents which may have taken place this season. In fact, it required the authorities years to actually identify them. From the even more all-pervasive "hundi" to the more superior trade-based mechanisms, capital trip takes place every day and in many forms. While most will be deprived of their good share of media publicity, some, such as for example PK Haldar or MP Papul, do obtain a quarter-hour of fame.

A good Transparency International Bangladesh (TIB) article from earlier this year suggested that around USD 3.1 billion (Tk 26,400 crore) is laundered out from the country every year. A 2018 IMF analysis reported that underground monetary activities in Bangladesh makes up about about thirty percent of its GDP. The majority of the black funds invariably, and understandably, fly abroad.

In the Basel Anti-Money Laundering (AML) Index 2020, Bangladesh fell to 38th position from 45th in 2019 among 141 countries. This means the country is more vulnerable to the criminal offense of capital flight. And trade structured capital flight remains a significant headache for Bangladesh. In line with the Global Financial Integrity record ranking, Bangladesh is among the best countries facing trade-based funds laundering (TBML).

Offered the stats, one will certainly ponder why the regulators are not able to rein in the problem. "It is the failure of the government agencies in charge of combating funds laundering. However, it really is tricky to notify from the exterior if this is due to their incapability or involvement in capital airline flight. The conditions of PK Halder or Shahid Islam (Papul) are just the end of the iceberg," recommended prominent banker, economist and previous deputy governor of Bangladesh Bank Khondkar Ibrahim Khaled.

He further added that addressing the problem of capital air travel is one of the direct tasks of the Bangladesh Financial Cleverness Unit (BFIU). "If the organizations are not to be able to do their careers, then the authorities, the cabinet, should make them in charge of their failures. The prevailing rules are sufficient to tackle the challenge of funds laundering; we are in need of the right enforcement."

BFIU, however, appears have its limitations. "Our core job is to acquire suspicious transaction information, analyse the info and talk about them in intelligence file format with police units hence that they can investigate," stated Abu Hena Mohd Razee Hassan, brain of the Bangladesh Financial Cleverness Unit.

BFIU was formed within compliance with recommendation 29 of the Financial Action Task Force, that says, "Countries should establish a financial intelligence unit (FIU) that serves seeing as a national center for the receipt and research of: (a) suspicious purchase reports; and (b) different information relevant to cash laundering, involved predicate offences and terrorist financing, and for the dissemination of the results of that analysis. The FIU will be able to get hold of more information from reporting entities, and should have access on a timely basis to the economical, administrative and police information that it needs to undertake its functions properly."

Beneath the Money Laundering Avoidance Act, there are 27 types of financial crimes. Predicated on the type of the crimes, BFIU transmits intelligence reports to distinct relevant agencies. For example, if the crime relates to corruption and bribery, the statement is sent to the Anti-Corruption Commission. For forgery and related crimes, intel would go to the Criminal Investigation Section; for trade based funds laundering, incorporating over-invoicing, under-invoicing, tax evasion and related economic crimes, information is distributed to the National Panel of Revenue. For personal crimes related to prescription drugs, the Narcotics Control Section is alerted. In the event of financial crimes related to inventory exchanges, intel is shared with the Bangladesh Securities and Exchange Commission "for even more investigation and bringing it to prosecution", added Abu Hena Mohd Razee Hassan.

Once intelligence is distributed to the agencies, it is up to them to transport onward the investigation and have subsequent action to bring the culprits to publication.

In regards to to combating trade-based funds laundering, BFIU has issued the rules for Avoidance of Trade Based Money Laundering in 2019. Abu Hena Mohd Razee Hassan believes that if these recommendations are strongly implemented by all relevant authorities, it would play a major purpose in curbing trade-centered capital trip. But BFIU can only just do so much. The investigative and enforcement authorities have to be extra prompt, efficient and genuine in taking immediate action on the intel shared by the BFIU. Any delay in this is only going to aggravate the problem, despite the formation of new products or issuance of latest guidelines.

With that said, Bangladesh's turbulent tussle with capital airline flight won't end anytime soon. As the nation has made some improvement in addressing the various varieties and mechanisms of cash laundering, rooting it out is usually an extended journey ahead, and the reason is simple: the country needs extra proactive coordination between cleverness units and enforcement agencies, and a solid political will to get rid of this problem forever.

The enforcement agencies need to address this issue with an iron fist, and for this they would need good backing from the federal government, since most of the money launderers flaunt monetary and political muscle. If the influential cash launderers-irrespective of their political affiliations-are taken to book, it'll send a solid and clear message never to only the fiscal criminals but also the enforcement organizations. As the new year approaches, one can only hope regardless of the many challenges, the federal government and the enforcement agencies would be more vigorous in eliminating the ailment of capital flight.

Source: https://www.thedailystar.net

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